Home and commercial

Home saw operating profit rise from £83.9m to £150.6m in 2019, and also demonstrated a significant improvement in COR to 86.9%. This resulted from a clamp-down on escape of water events and lower weather losses, DLG said.

The group’s commercial segment saw a slight fall in operating profit and a static COR of 95.7%.

Coronavirus and storms

This compares to an annual expected cost from weather damage of £64m, DLG said.

The coronavirus outbreak “has the potential to impact” the group’s 2020 travel business results, it said.

”We have travel reinsurance protection to mitigate the cost of an event over a 28 day period to £1 million up to a limit of £10 million. The full coverage, if utilised, can be reinstated once on the same terms. Currently, incurred claims are around £1 million”, it said.

”Like all businesses, we are subject to the consequences of disruption to financial markets and global supply chains which, over time, could impact the performance of our investments and the cost and speed of fulfilling customers’ claims.”

It said the new technology ”is beginning to land and although there is still much to do in this ambitious and complex programme, we are now moving into the second phase: our business transformation.

”From this phase, we plan to improve our cost position by reducing double run-costs and improving efficiency.

”We also aim to further increase the accuracy and speed of our pricing and underwriting; improve our competitiveness and responsiveness to change; and enhance our customer experience.

Group chief executive Penny James said the business had ”delivered a good set of results, and continued to improve the quality, while navigating a difficult motor market and delivering significant change in the business.

“The motor insurance market began to show signs of improvement in the second half of 2019, helping us return to growth while our other major markets were competitive, with pricing largely keeping pace with inflationary cost pressures,” James added.